Troubled hotels under new court-ordered management

Two adjacent Dothan hotels remain open despite being ordered into receivership by a Dothan judge.

The Quality Inn and Days Inn, located on Ross Clark Circle across from Southern Family Market, are currently being managed by Prism Hotel Groups under a court order executed Friday. The order came after the bank that secured the loan for the purchase of the two hotels filed a petition in Houston County Circuit Court, claiming the company that owned the hotels — Kronos Hotels and Resorts of Atlanta — was not making its promised loan payments.

It further claimed hotel owners were violating terms of the loan agreement by withholding revenue from the hotels that was supposed to be paid to the bank.

Also, the Alabama Department of Revenue has filed suit against the hotels, claiming unpaid state and lodging taxes.

“As a result of the refusal by defendants ... to turn over, or deposit with petitioner the rents and profits from (the hotels), petitioner has suffered irrevocable damages in the form of foregone funds that should have been used to repay petitioner but were instead wasted by the defendants,” states the petition, filed Nov. 20 by Montgomery attorney Bowdy Brown on behalf of the bank.

Circuit Judge Brad Mendheim granted the petition and placed management of the hotel in the hands of Prism Hotel Groups, a company based in Houston that specializes in third party hotel management. Prism will keep the hotels open and the court will ensure revenue is used to pay the bank loan. Courts often appoint receivers to manage a property until a court proceeding is completed.

The hotels made news last month when employees staged a hastily-arranged protest along Ross Clark Circle. Some employees claimed they had not been paid in weeks. Tuesday, a worker at Days Inn said employees were now being paid on schedule and had received back pay since Prism took over.

Kronos was forced to forfeit at least one other hotel as a result of the loan default. The Crowne Plaza Five Seasons in Cedar Rapids, Iowa, was placed in receivership this week, according to The Gazette of Cedar Rapids. Other Kronos-owned hotels in Pennsylvania, Missouri and Florida have been the subject of several complaints, ranging from bounced checks to unpaid taxes.